DTI Secretary Ramon Lopez (File photo)
MANILA – The Philippines remains an attractive market for manufacturing investments, Japan External Trade Organization (JETRO) Manila Office Investment and Economic Partnership Agreement (EPA) advisor Tomihiro Ando said Thursday.
At the Security Bank’s virtual economic forum, Ando cited a JETRO survey in December 2020 indicating Japanese businesses saw the Philippines as a good investment destination for manufacturing.
Ando said salaries in the Philippines are “much (more) stable than other countries” in the region.
The country’s demographics are also attractive with its young population and large market base, he added.
Ando said the JETRO survey shows that manufacturing cost in the Philippines relative to Japan is the second-lowest in the region, with cost only higher than Vietnam but lower compared to Asian countries like India, China, Malaysia, Thailand, and Indonesia.
The latest data from the Philippine Economic Zone Authority (PEZA) show that Japan has been the agency’s top source of foreign direct investments for the past 26 years.
Japan’s investments within PEZA zones alone amounted to PHP716.22 billion from 1995 to April 2021.
In the same event, Department of Trade and Industry (DTI) Secretary Ramon Lopez said current policies that the government is pushing also aim to attract investments in the manufacturing sector.
Lopez particularly cited the Corporate Recovery and Tax Incentives for Enterprise (CREATE) Act that cuts corporate income tax rates and offers more relevant fiscal and non-fiscal incentives that will help in enticing manufacturing investments.
“Making the investment climate in the Philippines significantly more attractive, the CREATE Act will rationalize, modernize, and offer more relevant incentives to investors. First, this will reduce the corporate income tax or CIT rate from 30 percent to 25 percent for large corporations and down to 20 percent for micro, small and medium enterprises (MSMEs). This reduction will be crucial for businesses that wrestle with the disruption in supply chains, and reduce the negative economic impact of the pandemic,” he said.
The trade chief said the DTI is also aggressive in promoting the Philippines as a manufacturing investment destination with its “Make It Happen in the Philippines” campaign.
Under this campaign, the DTI encourages foreign firms in sectors of aerospace, automotive, copper, and semiconductors, and electronics, as well as information technology and business process management. (PNA)
